Employers will see unemployment tax savings in 2025

Amount of employee wages that are taxed will fall to $9,000

Most Michigan businesses will pay less in unemployment insurance taxes in 2025, the Michigan Unemployment Insurance Agency (UIA) announced today.

Effective Jan. 1, registered employers who are current with their filings to UIA will be taxed on a smaller portion of the wages they pay to employees, called a taxable wage base. When calculating first quarter payments, due April 25, qualified employers will be taxed on the first $9,000 in wages per employee. That is a $500 reduction in the current taxable wage base of $9,500, which has been in place since 2021.

“Michigan’s strong, sustained economic growth has resulted in healthy payments into the Trust Fund,” said UIA Director Julia Dale. “Coming out of the pandemic, Gov. Whitmer has implemented policies that have benefited businesses across the state. Projections show the Trust Fund will continue to be strong for the foreseeable future and now is the right time to provide tax relief to large and small businesses that are part of the state’s robust business community.”

The lower taxable wage base is triggered when the unemployment insurance Trust Fund balance is at or above $2.5 billion on June 30 and the next calendar quarter. The Trust Fund’s status can be tracked using the UIA Economic Dashboard.

Taxes collected from employers are deposited into the Trust Fund. Unemployed workers who qualify for benefits receive payments that are drawn from the Trust Fund. 

To qualify for the reduction, an employer must have completed and submitted all required quarterly tax reports and cannot be considered delinquent, which means they have an unpaid balance of $25 or more in tax, penalty or interest.

In February, delinquent employers will be sent Form 6354, Notice of $9500 Taxable Wage Base to remind them to file any missing report and/or pay an outstanding balance. Delinquent employers have 14 days to fix outstanding issues with their account to qualify for the reduction.

More information about the taxable wage base can be found at Michigan.gov/UIA.

UIA reminds employers who have 100 or fewer employees that they can participate in the apportionment program to spread out their first-quarter tax payments, which are usually the largest, over all four quarters of the year. Sign up for the program by clicking on the apportionment button when filing First Quarter reports using the Michigan Web Account Manager (MiWAM).

How UIA helps Michigan employers

Lowering the taxable wage base is one of the many ways UIA is helping Michigan businesses thrive:

• The plain language Employer Help Center answers employers’ questions about unemployment tax and claim issues as well as job retention programs, was launched earlier this year. The innovative Help Center was launched in May and quickly has become one of the most popular resources provided by the agency. It can be found at Michigan.gov/UIAEmployerHelpCenter.
• Using the UIA Economic Dashboard, employers can explore underlying trends in unemployment insurance in Michigan. Data provides a rich understanding of the impacts of unemployment across industries, occupations, and communities. It also provides insights into which sectors are experiencing layoffs, claimant demographics, and the regions most affected. Find the dashboard at Michigan.gov/UIAEconomicDashboard.
• A new computer system that will be used by employers, third-party administrators, and claimants is being designed and tested. Called MiUI, it will replace the decade-old MiWAM and make it easier to file reports and claims as well as provide a user-friendly interface and robust anti-fraud processes.
• Six advocates have been added to the Advocacy Program, which offers free legal advice to employers and workers who appeal of UIA redeterminations.
• Thought leaders from the labor, business, and jobless advocate communities are part of the UIA Modernization Workgroup. The coalition offers important insight on significant improvements in how the agency can better serve Michigan employers and workers.
• UIA administers programs that allow employers to retain skilled workers or attract new employees. Other programs make it easier to submit separation or layoff information electronically to UIA. Go to the Employer Homepage at Michigan.gov/UIA for more information on these and other programs that benefit Michigan businesses.

Innovations for workers, too

Director Dale has also launched many innovative resources for workers since being appointed in October 2021 by Gov. Gretchen Whitmer to lead UIA, the agency’s 11th director in as many years. Director Dale has launched a wide-ranging transformation of the agency into a national model for fast, fair, and fraud-free service, including:

• The UIA Claimant Roadmap, a six-step guide to applying for and understanding benefits. The roadmap is an easy-to-follow, user-friendly resource that can be found at Michigan.gov/UIAClaimantRoadmap.
• Online Coaching Sessions, which are web-based group trainings led by UIA staff on topics such as filing a claim, understanding a Monetary Determination letter, the protest and appeals process, and seeking work and registration requirements.
• Extending to 14 days in advance the period when claimants can schedule a phone, virtual, or in-person appointment at one of 12 Local Offices. Go to Michigan.gov/UIA to select a convenient time and day.
• Answers to frequently asked questions, or access resources and toolkits, can be found at Michigan.gov/UIA, which is optimized for reading on mobile phones or tablets. You can also browse a library of helpful instructional videos on YouTube.
• Creating the UIA Community Connect program to provide hands-on help for workers navigating the unemployment insurance application process. Staff also connect workers and employers to UIA’s outreach and education resources.
• Renovating Local Offices to create an improved user experience and make security upgrades. Projects have been completed in Grand Rapids, Lansing, Saginaw, and Sterling Heights. The Detroit office will also be renovated.

Modernizing, transforming UIA

Other transformative changes at UIA:

• Creating a Legal and Compliance Bureau to leverage collaborative anti-fraud practices to pursue bad actors who steal taxpayer money.
• Extending through June 2025 nearly 80 limited term employees in the Fraud and Investigations Division.
• Requiring new ethics and security clearance policies for employees and contractors.
• Partnering with the Michigan Department of Attorney General, and local, state, and federal law enforcement agencies to stop fraud. Since March 2020, 166 criminals have been charged with unemployment fraud, 125 have been convicted, and 106 sentenced to prison and ordered to pay restitution.
• Scoring 100 percent for the third year in a row from the USDOL for employer audits in 2020-22, meeting the reasonable assurance of quality benchmark.
• Reassigning staff and resources to address the largest categories of claims contributing to the agency’s case backlogs.
• Halting overpayment collections on claims filed since March 1, 2020, while the agency addresses pending protests and appeals.

Need help or have questions about a claim?

Meet with an agent: Schedule an in-person, phone, or virtual meeting at Michigan.gov/UIA.

Chat with an agent: Available through MiWAM Monday through Friday, 8 a.m. to 4:30 p.m.

Call Customer Service: 1-866-500-0017, Monday through Friday, 8 a.m. to 4:30 p.m.

Ask Ava: UIA’s chatbot at Michigan.gov/UIA can answer many questions.

Find answers: FAQs, videos, toolkits, and other resources at Michigan.gov/UIA.